We like to enforce business rules at the database level wherever
we can, for the simple reason, particularly the business we are in, most database update happens
outside the end-user application layer.
That is not to say you shouldn't enforce at the application level too, but that the database is the last
line of defense, is usually more self-documenting than application code can be, and also protects you from your
programmers, even when that your programmers is you.
Domains are objects that you will find in many high-end
standards-compliant databases. They exist in SQL Server, Oracle, IBM Db2, Firebird, and PostgreSQL to name a few.
Domains have existed for a really long time in PostgreSQL. In PostGIS topology, Sandro Santilli (usually known as strk), takes advantage of them for fleshing out the topology support, and I got turned on to them by him.
With that said - let's dive into domains.

What are domains?

Domains are essentially a reusable packaging of check constraints. You use them as if they were a custom data type.
The nice thing about them is that they are usually transparent to applications that
don't understand them.

Example 1: Enforce pay ending/pay day happens only on certain days of the week

Here is an example -- suppose you had a payment system, and you had a rule that the pay thru end date has to
fall on a Friday. You could create a domain such as the following:

Friday, April 08. 2011

In a prior article Use of Out and InOut Parameters
we demonstrated how to use OUT parameters and INOUT parameters to return a set of records from a PostgreSQL function.
There is another approach to doing this, and that is to use the ANSI Standard RETURNS TABLE construct.
If you come from a SQL Server or IBM DB2 background, the RETURNS TABLE construct is probably most familiar, but still
how you use it and what is legal in it is a little different than it is in SQL Server or IBM DB2. We'll save the
contrast compare as a topic for another article.

In terms of performance between using OUT vs. RETURNS TABLE, we haven't noticed much of a difference. The main thing that is
nice about RETURNS TABLE is just that it's syntactically more pleasing in the sense that its clearer the structure of what you are returning.

In these next examples, we'll demonstrate similar examples we showed in the aforementioned article except using the
RETURNS TABLE.
Be warned that the RETURNS TABLE construct is only available for PostgreSQL 8.4+, while the OUT approach
has existed since PostgreSQL 8.1. With that said, if you need your code to work on 8.3 or lower, you can't use RETURNS TABLE.
When in doubt about a feature and you are creating code that needs to support earlier versions of PostgreSQL
(as we have to in the PostGIS development group),
or you want to get stubborn users off old antiquated versions of PostgreSQL and need a bit of ammunition
(as we have to (on PostGIS development including our own developers - and you know who you are :) ) )
check the
PostgreSQL feature matrix.
It will save you a lot of grief.